State leaders craft emergency manager alternative

LANSING, Mich. (AP) -- A proposed replacement for an emergency manager law rejected by Michigan voters has been approved by a state House panel.

The House Local, Intergovernmental and Regional Affairs Committee voted 9-5 Thursday along party lines with one "pass" vote on what's known as The Local Financial Stability and Choice Act. The legislation now goes to the full House for consideration.

Republican Gov. Rick Snyder and legislative leaders unveiled it on Wednesday. The plan gives four choices to communities and school districts found to be in a financial emergency: accept an emergency manager, bankruptcy, mediation or a consent agreement with the state like the one in Detroit.

Voters decisively rejected Proposal 1 in November. The state since has been operating under a previous law that gives managers fewer powers.

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State leaders craft emergency manager alternative

LANSING (AP) -- Financially strapped local governments and schools in Michigan will have more choices and control over their future under a proposed alternative to the emergency manager law rejected by voters, state officials said Wednesday.

Gov. Rick Snyder and legislative leaders unveiled a plan that gives four choices to communities and school districts found to be in a financial emergency: accept an emergency manager, Chapter 9 bankruptcy, mediation or a consent agreement with the state like the one in Detroit.

The plan gets its first hearing Thursday before the House Local, Intergovernmental and Regional Affairs Committee. Voters rejected Proposal 1 in November, and the state has been operating under a previous law that gives managers fewer powers.

"We have got something that we feel is good, sound public policy that will very clearly recognize and respect the will of the voters while making sure we also have local control," Snyder spokeswoman Sara Wurfel said. "And ensuring the tools we need to help protect communities and schools as well as residents and taxpayers."

Should a local government choose an emergency manager, the state would pay for the manager, and local officials would have the option of removing the manager after one year and with a two-thirds vote of its governing body.

As with the rejected law, the manager would have the power to change or cancel contracts but local officials also develop an alternative plan provided it generates equal financial savings.

The announcement came the same day that Michigan Treasurer Andy Dillon said he'll likely order a review of Detroit's municipal finances, a 30-day process that could lead to a state takeover of its largest city that's deep in debt and has a budget deficit of more than $200 million.

A consent agreement between Detroit and the state last year allowed the city to avoid the appointment of an emergency manager, but some worry that Bing and the City Council aren't moving fast enough to enact financial reforms. Treasury spokesman Terry Stanton said the financial manager "option cannot be taken off the table" for Detroit.

Senate Majority Leader Randy Richardville said Wednesday that the alternative proposal aims to address the concerns of voters, who "didn't want to disenfranchise their own local officials."

"What we're trying to do is put some choices on the table in front the people who were elected so they can decide what their own fate is," he said.

At the outset, it doesn't appear likely that a replacement bill would please all critics of the original emergency manager law.

A spokesman for Stand Up for Democracy, the coalition that turned in more than 200,000 signatures to get the referendum on the ballot, said he was shocked to hear about the proposed alternative. Greg Bowens said that representatives of the group met recently with a Snyder administration official who expressed interest in working with them but nothing came of it.

Bowens also cautioned state officials not to misread the voters, who rejected the law in 77 of the state's 83 counties.

"That vote ... was indicative of Public Act 4 in particular and emergency managers in general," Bowens said. "It would be complete underestimation of the dislike for the concept of emergency managers that exists out there in the state of Michigan."

Betsy Coffia, who helped lead a campaign to gather 30,000 signatures in northwestern Lower Michigan, said she wants to withhold judgment until she has carefully reviewed the proposal, but she's not optimistic.

"My faith in Lansing is pretty shaky right now," said Coffia, a Traverse City social worker who unsuccessfully ran for the state House against GOP Rep. Wayne Schmidt. "They are pushing so many pieces of legislation through -- they are slamming so many things down our throats."